DoubleVerify Holdings, Inc. Fireside Chat at Baird Global Consumer, Technology & Services Conference 2025: Discussing Growth, AI Integration, and Strategic Acquisitions

Key Takeaways

TL;DR: DoubleVerify is leveraging its integrated digital ad quality platform to drive robust growth across activation, measurement, and supply segments via innovative products (ABS, Meta pre-bid, Scibids, Rockerbox) amid a stable yet agile macro environment. Key highlights include strong Q1 performance (e.g., +20% in activation, +34% in retail media within supply), effective AI deployment for efficiency and fraud management, and a strategic focus on further integration and expansion both geographically and product-wise.

• Macro Environment & Advertiser Trends
  • Advertisers remain resilient amid “stable instability” from recent shocks (COVID, Ukraine war, etc.), with a continued emphasis on agility and performance.
  • Ad spend remains robust, with advertisers increasingly deploying spend through agile, measurable channels like programmatic advertising.
  • CEO Mark Zagorski: “Advertisers are incredibly agile with their ad spend … still spending, just doing so with an eye to agility.”
• Business Segments & Drivers
  • Activation:
    • Q1 rev. growth accelerated to +20% driven by the premium ABS product, with ABS growing around +16%—a record rate in several quarters.
    • New logos such as Kenvue, Microsoft, and Kellogg’s, along with upsells to existing clients like Lilly, have boosted activation.
  • Measurement:
    • Growth driven by the full suite now available on social channels (e.g., Meta measurement and activation).
    • Noteworthy adoption on CTV and the anticipated impact from social activation where only 60% of top 100 clients had previously adopted Meta measurement.
  • Supply Side:
    • Represents ~10% of rev. as a SaaS model; recent growth attributed to a one-time step-up from winning Moat’s former clients and strong retail media network performance (+34% in Q1).
• Product Innovation & Acquisitions
  • Pre-Bid Product (Meta):
    • Launched in Feb., the pre-bid solution saw “several dozen” customers go live, delivering up to a +9%p increase in brand suitability—highlighting improved ad quality across platforms.
  • Scibids Acquisition:
    • Acquired nearly 2 years ago to optimize bid pricing; Q1 rev. growth for Scibids reached over +40%.
    • Its algorithmic bidding optimization not only reduces costs but also bundles with core quality services, offering clients measurable cost savings (e.g., $1 spent on Scibids kicks back $4 in media quality savings).
  • Rockerbox Acquisition:
    • Integrates media mix modeling and multitouch attribution, closing the loop by verifying ad performance and aligning with client brand integrity.
    • Received strong customer reception, differentiating DoubleVerify from bespoke consulting firms and reinforcing product stickiness.
  • Integration Goals:
    • Upcoming Innovation Day will emphasize the seamless integration of Rockerbox and Scibids, a dynamic platform roadmap, and the role of GenAI (Agentic AI) in enhancing customer interactions and internal efficiencies.
• AI Adoption & Efficiency Gains
  • Internally, DoubleVerify leverages AI to boost coding efficiency (20-30% faster) and accelerate content labeling (up to 1,000x faster than manual processes).
  • AI tools enable predictive modeling in video analysis, essential for navigating billions of frames on platforms like TikTok—improving margins and reducing costs.
  • Externally, AI drives both the challenges (e.g., AI-generated fraudulent content) and the opportunities for DoubleVerify to enhance fraud detection and ensure ad quality.
• Capital Allocation & Strategic Investments
  • Maintaining strong profitability with margins over 30% and nearly $200M on the balance sheet post-buybacks ($120M last year, $80M YTD).
  • Continued focus on R&D and innovation investments to fuel product road map expansion, market penetration (noting only 30% geographic penetration outside the U.S.) and potential M&A opportunities to broaden product and geographic reach.
  • The strategy emphasizes organic growth and leveraging new acquisitions to enhance integrated offerings while ensuring superior top-line performance.
• Guidance & Investor Messaging
  • Q1 performance outpaced full-year fiscal '25 guidance (17% vs. 10%), underpinned by broad-based growth from existing clients, Moat integration, and new social activation product uptake.
  • Addressing isolated concerns (e.g., one large customer’s cut in spend due to commodity price factors) with reassurance that such actions have not recurred among other clients.
  • Management reiterates the enduring value proposition: “Our core remains to be the arbiter of ad transaction quality,” ensuring independence across both the open web and walled gardens, which is pivotal for large brand advertisers.
• Looking Ahead
  • Emphasis on further product integration (linking transaction data, dynamic optimization, and refined bid strategies) that enhances the overall value proposition and customer retention.
  • Expansion into underpenetrated markets and platforms (e.g., additional social channels and improved CTV transparency) to unlock significant upsell opportunities.
  • Upcoming Innovation Day will detail the platform’s future vision, GenAI initiatives, and insights into continued integration of Scibids and Rockerbox for a compelling, differentiated play in the digital advertising tech space.

Overall, DoubleVerify’s leadership underlines a balanced mix of innovative product development, strategic acquisitions, and expansive market reach—all of which position the firm to sustainably grow its rev. while reinforcing a robust moat in the highly competitive digital advertising ecosystem.

Call Q&A

• Vikram Kesavabhotla: Can you provide a brief overview of DoubleVerify and its value proposition?
  • Mark Zagorski: DoubleVerify ensures the quality of ad transactions by making sure ads are viewable, in a brand suitable environment, and free from fraud. We work across the open web, mobile apps, and walled gardens, partnering with companies like Meta, Snap, TikTok, and YouTube.
• Vikram Kesavabhotla: How are advertisers reacting to the current macro environment?
  • Mark Zagorski: Advertisers have become agile and resilient, using tools like programmatic advertising to deploy ad spend flexibly. Despite caution, ad spend hasn't decreased overall.
• Vikram Kesavabhotla: What are the drivers of growth in the activation segment?
  • Mark Zagorski: The activation segment saw strong growth due to ABS (authentic brand suitability) and new clients like Kenvue, Microsoft, and Kellogg's. Upsells and volume increases from existing clients also contributed.
• Vikram Kesavabhotla: What are the growth drivers for the measurement segment?
  • Nicola Allais: Social media is a key driver, especially with the full suite of products available for Meta. CTV also shows strong growth in measurement.